Placido Hilukilwa
SMUGGLERS of cheaper Angolan fuel are causing irreparable damage to the Namibian economy. They harm not only businesses in the energy sector but also deprive the state, the Road Fund Administration (RFA), and the Motor Vehicle Accident (MVA) Fund of vital earnings, and contribute to the unemployment rate by forcing fuel stations to close. The latest victims of illicit cross-border fuel trading were the Puma service stations at Oshikango and Ondobe, forced to shut down recently due to lack of customers.
The Oshikango service station was the third to go out of business in Helao Nafidi town as a direct result of rampant cross-border fuel smuggling, which continues unabated despite intensive police patrolling of the border. The Puma service station at Ondobe along the Onhuno-Eenhana main road has also ceased business, as the negative effects of fuel smugglers are felt even in far-off places such as Oshakati and Ondangwa, where the number of vehicles filling up at the pumps has significantly dropped.
The Fuel “Tourism”
According to the police, the problem is aggravated by Namibian vehicle owners who simply cross the border to fill up at fuel stations in Angola, which is itself not illegal but is still detrimental to the Namibian economy. Speaking in an earlier interview, Nampol’s Andrew Nghiyolwa said that a huge quantity of illicit fuel has been confiscated and suspects arrested, and the police have tightened the net around the smugglers, but still, some do manage to sneak in unnoticed.
The pump price of heavily subsidized Angolan petrol stands at 300 Kwanzas (N$6.72) per litre compared to Namibia’s pump price of slightly over N$20 per litre. The smugglers, well known locally as “ngungula,” resell the fuel in five-litre and 25-litre containers. Prices fluctuate between N$60 and N$90 for a five-litre container and between N$250 and N$300 for the bigger container, but it all depends on the day’s exchange rate in the Angolan black market.
Irresistible Prices
“Very few people would be willing to pay N$21 for a litre of petrol when that same quantity of fuel costs N$15 cheaper a few blocks away. The temptation is simply irresistible,” said a trader at Engela who mentioned that, despite earlier reluctance, he is now filling up at filling stations in Angola’s border settlement of Santa Clara.
However, it is expected that the era of cheaper Angolan fuel will soon be a thing of the past. Angolan president Joao Lourenco issued a decree early this month removing petrol subsidies. No effective date was set. According to the Angolan media, the presidential decree enjoys the support of the International Monetary Fund (IMF), which, however, urges the government to ensure that the measure does not have negative effects on the poor.
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